Creating value in the Age of Sustainability part 3 of 3

We can raise ourselves up so far by pulling at our own bootstraps – we can achieve far more by working together to develop effective frameworks. Individual businesses are already doing a great deal, pushing at the boundaries of what is possible using their own resources; often businesses can achieve more through collaboration; but even more could be done when business works with civil society and government to create frameworks for ‘sustainable competitiveness’, to fully harness the potential for business as a ‘forceforgood’.

The 21st Century Value Matrix

As I detailed the examples set out in Blog 2 of this series, I was trying to understand the patterns of this breaking wave of value creation – and above all to think about how these first waves could be sustained and grow in power, achieving a systemic tipping point. In so doing, the idea of the 21st Century Value Matrix grew, which I hope you find useful.

It provides a way of organising the examples listed, seeing the patterns and thinking about how to scale up and perhaps reach a tipping point – and of the critical importance of creating frameworks.

The matrix develops a 3 x 3 breakdown:-

On the horizontal axis, a business life cycle model, recognising the pilot phase, when things are scaled for market and the vital role of fit for purpose frameworks to achieve full scale;

On the vertical axis, I am making the distinction between new processes which fundamentally drive down costs and reduce carbon footprint on the one hand; and new products and services which help us change how we live and work, and thereby our carbon and biodiversity impacts.

I am also making use of a further set of examples: those which are not driven or positioned around sustainability, or have not been to date, but which have huge sustainability outcomes – think about the savings in production and distribution made possible by the iPod and Sky+ (TV hard drives), or the opportunity cost in terms of environmental impact enabled by the Eurostar train which connects London and Paris/Brussels, which would only have been possible by the framework created by European governments.

Using these categories here is the matrix – the examples in italics are taken from Blog 2.

“Pressure is mounting on cities to create transport ecosystems. Steering the change are automakers, led by the world’s third-largest car company” writes Naren Karunakaran. With thanks to Jay Shah of Mahindra for forwarding this article.

Here are a few excerpts:

Bill Ford bared his mind to a select group at the University of Michigan in the US recently. "Don’t assume we are always going to be in the cars business," he said. Ford believes the automobile industry is on the very "edge of a revolution", and he wants to be the one driving it.

A crack team fleshing out Ford’s ‘blue ocean strategy’ describes the business that will take Ford to the next level as ‘New Mobility’. It is grounded in the tenets of sustainable mobility, where the accent is on access, equity, affordability, and the avoidance of disruptions in societal, environmental and economic well-being. New mobility rests on the edifice of public transportation or mass transit.

The Ford gameplan is to mutate into an ‘integrator’ of mobility hub networks; from being a product-centric to a service-oriented company; from being a purveyor of vehicles to a provider of mobility solutions to expanding cities across the world.

The ‘networks’ that Bill Ford is banking on comprise numerous hubs, with each being a transfer point where multiple mobility options and services come together. It deploys technology to link diverse transportation systems—rail, bus, metro, feeder systems, car sharing, bike sharing—into an organic whole, and extends flexible, seamless, door-to-door trips, for the rich and the poor. (ReadStepping on the pedal)

New Mobility is all about taking public and even non-motorised transportation (cycling, cycle rickshaws and walking) centre-stage. And Ford wants to make a successful business of it. The goal of New Mobility is to embody some of the desired characteristics of the personal vehicle—comfort, status, its aspirational qualities—and eventually "displace its use".

New Mobility is, therefore, Ford’s attempt to extricate itself from the "red ocean" it is mired in today; a steep decline in margins, and a dog-eat-dog struggle for survival and market share in personal vehicles.

Finally, this quote from Anand Mahindra, which absolutely recognizes the importance of ‘frameworks’